Even MNC service standards turn desi

July 18, 2000

In an environment where individuals cannot enforce service efficiency and consumer rights, even the most efficient multinationals begin to adopt desi standards. The exaggeration in that statement is only to the extent that MNCs did initially provide so much better service that they raised our expectations to international levels. But once at home in the Indian market, they too settle down to a very Indian callousness towards the consumer.

There is a predictable pattern to the lowering of service standards. Most MNCs who rushed to India post liberalisation, were tempted by the 250 million strong Indian middle class projected by global consultancy firms as their target audience. They rushed into the country with the notion that this class was comparable to Far East Asian consumers in terms of spending power. Soon they realised that the target market was between 100 million and 150 million, that too for mass market products. It was even lower for premium cosmetics, perfumes and personal care products which have all been seeking entry into India.

With wrong notions about the market, most MNCs, with the notable exception of Mcdonald's, entered the market with lavish advertising budgets, big price tags, fancy offices/retail outlets, well-trained, English speaking staff and, of course, excellent service. The Indian press which fell for the publicity binge that preceded every major MNC's entry into India aided their false perceptions. The first-time visits of their globally famous CEOs, and the launch of brands, which for decades were on the must-buy lists of all foreign travellers were routinely covered with fawning adulation.

A few weeks after the launch, reality usually begins to dawn -- companies ranging from colas to Kellogg cornflakes and Oriflame or Amway to Domino's pizzas realised they were hopelessly over-priced to be mass market products. Mass volumes and market penetration cannot be achieved without dropping prices.

The drop in prices often meant a drop in service standards as well. For instance, Domino's drop in prices and its product-testing of Indianised pizzas seems to be accompanied with late deliveries. The number of times that a pizza is delivered more than half an hour late has increased significantly, even when the destination is less than two minutes away from the outlet. The price: a Rs 30 discount on the pizza. But what happens when the pizza is delivered nearly an hour late? The manager rudely points out that Rs 30 is all the discount you get. He probably knows well enough that on Friday nights, you simply cannot refuse to accept delivery unless you are planning to go hungry.

It gets worse when it comes to consumer durables. My Philips music system has needed to be fixed up in every one of the 12 months of warranty. If the company sent the service mechanic fewer than 12 times, it is not because the music system failed to die on me with regularity but only because I let a few weeks go by before filing my complaint and figuring out a day when the mechanic would find someone at home to repair the system. Now that the warranty is over, I am getting ready to sign an expensive lifetime service contract.

Philips, of course, does not care that my previous music system -- a cheap unbranded foreign product -- never saw a mechanic for 10 years until I was foolishly tempted by the ubiquitous exchange offer non-bargain. Both Domino's and Philips know that an Indian consumer has little choice but the lump it. Consumer courts do not function; the regular courts lead you into expensive and never-ending legal battles. Even MNCs realise that competition may be a threat, but never the consumer -- s/he has little choice but to live with bad service.

The cellular telephone companies are another good example. When they launched their services, Indian consumers, who were used to the callous indifference and constant extortion of monopoly government departments and their linesmen, were stunned by the sheer demonstration of how efficient phone companies can be. As the call charges have dropped and the number of subscribers has increased customer services has been the casualty. Take the Orange service -- these days it makes subscribers see red. During peak commuting times, calls drop twice or thrice during a conversation. The much advertised helpline number is either never picked up or disconnects after a long spiel of directions.

When I lodged a written complaint at the office, the girl at the counter earnestly admitted to all the problems and said that they were being rectified. In fact, she told me that calls get disconnected often during peak times. The same girl promised to send one of her salespersons to get a subscription from a friend, but has failed to send anyone over for four days. Hey, they do not even want new subscribers anymore!

It gets worse in the financial services sector. Foreign mutual fund companies came to India promising US style services and super-fast redemption time. They have not only demanded more time, but have also turned sloppy about service standards. Investor-related Internet sites have more complaints listed against foreign mutual funds these days than they do about Unit Trust of India -- once a hugely callous organisation.

As for foreign companies in the creditcard and consumer finance companies, I have a nice little collection of horror stories about their sloppy services -- for instance, the friend who was acutely embarrassed when her Hongkong Bank card was not honoured because the bank had messed up the formalities of transferring her account from Delhi to Pune. Or the friend whose American Express debit card was dishonoured after he had hosted a party for a couple of dozen colleagues in Calcutta. After a eight-month wrangle, the bank has apologised for its goof-up in recording basic information about his financial status. American Express is not even talking about compensating him for the humiliation, the correspondence, innumerable telephone calls to its various officials and the delay in extracting the apology and the confession.

After all, this is India. Indian consumers are expected to be tolerant of bad service and in fact grateful that they are serviced at all. Nobody talks about compensation, because they know that even if a consumer drags them to court and wins, he will barely be awarded costs and almost never exemplary damages. In fact, it seems to make business sense to offer desi service standards, unless, of course, the competition too is a top MNC and the head office is monitoring the Indian market very closely.